US Justice Department Sues Six US Landlords Conspiring to Keep Rents High

The lawsuit accuses six landlords of using algorithms and sharing data to avoid rent reductions, hurting renters nationwide.

By Thea Felicity

Jan 08 2025, 09:50 AM EST

Rental Prices For Single-Family Homes Soars 12.6 Percent — LOS ANGELES, CALIFORNIA - MARCH 15: A "For Lease" sign is posted in front of a house available for rent on March 15, 2022 in Los Angeles, California. Single-family rental home prices are soaring and increased a record 12.6 percent in January compared to the previous year, according to new data from CoreLogic. Mario Tama/Getty Images

Six big landlords in the US have been served with a lawsuit by the Department of Justice for using secret algorithms and sharing sensitive information with each other to maintain high rents nationwide.

The lawsuit comes at a time when American renters are struggling with more than 30% of their income going toward housing. As wages fail to keep pace with cost increases, the rent crisis is getting worse, and more and more renters, especially children, face eviction.

The complaint, reported by AP News, alleged that these landlords, operating over 1.3 million rental units together, had colluded to prevent a rent reduction by utilizing an algorithm to determine the rent and exchanging data regarding rental availability with their competitors. It is further alleged that the data exchanged included vacancy rates, pricing, and even rents for the next quarter. Doing this have possibly prevented the entry of competitors who might otherwise have led to reduced rents.

US Landlords Sued for Colluding to Keep Rent Prices High

One of the firms sued is Greystar Real Estate Partners LLC. Known as one of the largest in the industry, the landlord firm has denied the allegations made by the US DOJ, arguing that it has always conducted its business with integrity.

The company also being targeted by the Justice Department is RealPage, a company that gives software to landlords to decide how much to charge for rent.

According to VCPost, the software used sensitive rental data to align the pricing strategies with other similar landlords, avoiding competitive pricing that would benefit renters. RealPage has defended its software, saying it is only used on a tiny percentage of rental units across the United States, and that other factors - such as a shortage of housing - are mainly responsible for high rent prices.

All companies accused are sued based on their involvement in anti-competitive practices by collaborating with other firms to avoid market competition.

One of the landlords already agreed to cooperate with prosecutors and has offered to settle the case. The proposed settlement will ensure that the company does not use the data and algorithms of other competitors illegally. But the main objective of this lawsuit is the reduction of influence large landlords have on the housing market to allow millions of Americans to afford renting.